Growth in Giving Slackens at Foundations

The growth in foundation giving in 2001 slowed to its lowest level in four years, according to a new report by the Foundation Center.

The report, “Foundation Giving Trends: Update on Funding Priorities,” presents the findings of an annual study of grants of $10,000 or more from 1,007 community, corporate, and private foundations in the United States.

Grants included in the report totaled $16.8-billion, and represent more than half of all foundation giving in the United States in 2001.

According to the report, foundation giving rose by only 11.6 percent, or $1.7-billion, in 2001 compared with a record 30-percent jump the previous year.

Over half of the increase — $982.4-million — came from five of the largest foundations in the United States: the Ford, William and Flora Hewlett, Robert Wood Johnson, and David and Lucile Packard Foundations, and the Lilly Endowment.

The report said that the “sputtering out of the stock-market climb in late 2000 and onset of recession in early 2001 brought an end to the remarkable growth in foundation resources over the preceding half decade.” It said that “beyond 2001, the continued economic malaise and stock-market decline — exacerbated by the September 11, 2001, terrorist attacks — have led to a marked reduction in foundation resources.”

Among other findings presented in the report:

• Relief and recovery efforts related to the September 11 terrorist attacks received more than $1-billion, with the bulk of funds coming from corporations. Ninety-three private foundations provided 355 grants directly related to the attacks for a total of $89.3-million, and provided an additional $9.6-million for organizations focusing on the war in Afghanistan, the anthrax scare of 2001, and security improvements in the United States.
• Education organizations continued to outpace other groups in grant dollars, receiving the largest share of funds — $4.5-billion — for the 13th consecutive year. Three-fifths of that money was directed to higher-education institutions. Health organizations, which garnered $3.4-billion, received the second-largest portion of funds. Together, education and health groups received more than 47 percent of all grant dollars in 2001. The smallest increases in grant dollars were to environmental and animal-related groups and to human-services organizations, which rose by 5.7 and 3.2 percent, respectively. However, human-services groups captured the largest number of grants — 30,933 or 25 percent.
• Half of all grant dollars in 2001 went to support nonprofit programs. Capital support, including contributions to endowments, received 22 percent of grant funds, while 16 percent went for general and operating support.
• Sixteen private health foundations created from the sale of nonprofit health-care organizations gave $320.8-million in grants.
• In 2001, foundations awarded 30 grants of $25-million or more, five more than in 2000, and 66 grants between $10-million and $25-million, five more than the previous year. In 2001, foundations gave a record 659 grants of $2.5-million or more.

“Foundation Giving Trends” is part of the Foundations Today Series published by the Foundation Center. The set of five reports is available for $95 from the Foundation Center, Attn: Customer Service, 79 Fifth Avenue, New York, N.Y. 10003-3076; (800) 424-9836; fax: (212) 807-3691; http://fdncenter.org.